There is no specific age to fall into financial folly. With every new monetary milestone, business goal, and responsibility comes a new perspective on managing your finances or messing it all up. If you find yourself guilty of a spoiled personal financial viewpoint, you are not alone. Every generation reveals many significant mishaps, poor choices, and financial mistakes that its members often make. The most innovative way to avoid creating or repeating such blunders is to recognize and understand such issues before it’s too late. Keeping that in mind, here are five of the most common money mistakes each generation seems to make.
Individuals in their 20s – Must overcome the fear of investment
Young individuals need to invest significantly in growth stocks. Though they accompany some risk, they offer the immense potential for higher returns over time. Sadly, too many people in their 20s are afraid to take risks or are extreme risk-haters who avoid investing. Instead, their portfolios are inclining on their assets and little on stocks.
According to experts, one of the financial mistakes of risk aversion stems from financial illiteracy and a terrible generational fear of failure. Also, they believe today’s young generation is more skittish due to unpredictable events they have witnessed in their lifetimes, such as the financial meltdown and the 9-11 attack. To date, mutual funds are one of the most practical ways to ease the angst about investments. They begin with riskier growth assets and, over time, slowly transition to more conservative holdings.
Today, more and more Americans are waiting until their 30s to begin a family or purchase a house, marking this age as a turbulent time. Although these young adults often think they must live the way their elders did, building that level of financial status and comfort takes considerable time. Attempting to live that ideal lifestyle by shrinking credit card debt and purchasing a big house will eventually make it more challenging to fulfill their long-term financial goals.
Poor investments are among the most common financial mistakes that today’s 30’s generation makes due to the lack of financial knowledge of the several potential opportunities and available options. Young investors lacking the willingness or time to educate themselves might consider approaching financial professionals and bookkeeping experts for intelligent decision-making.
Individuals in their 40s – Baring family expenses all alone
The ’40s is the period with the most burdensome expenses – raising kids, buying homes, maintaining a family, baring their children’s education expenses, and possibly even caring for an aging parent. Such burdens must be managed proactively to prevent short- and long-term difficulties. Baring all of the financial burden alone is one of the biggest financial mistakes that the 40’s generation makes today. Instead, they must encourage sharing the financial burden among other family members and encourage their children to be financially independent by working a part-time job or applying for scholarships. Also, they should start living within their means and build an emergency fund as soon as possible.
Individuals in their 50s – Trying to catch up
Too many people reach their fifties and realize they have nothing saved for retirement. Such financial mistakes can be avoided if individuals start saving for retirement far earlier. With the hope of building a business to support their retirement years, an increasing number of Baby Boomers in their 50s are turning towards entrepreneurship. However, it can render a risky proposition with significant upsides and downsides.
Although retirement feels uncomfortable when one has to prioritize saving, work a side job for necessary income, and downsize a home and lifestyle, it defeats the fear of an under-funded retirement.
Individuals in their 60s and beyond – Fail to ask for help
According to financial experts, today’s older Americans are comparatively less mature than elderly citizens of earlier generations. However, age inescapably lowers the brain’s analytic abilities, making it hard to avoid financial mistakes. Hence, every person must have people they can rely on for financial assistance and decision-making matters in their later years. These people could be your family members, friends, financial advisers, or a mix of them.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.